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Eviction for mortgage arrears

Mae’r cyngor hwn yn berthnasol i Cymru

If you're in mortgage arrears, your mortgage lender will want you to clear them.

If you aren't able to clear them, your lender will try to get you evicted from your home. This is called taking possession. It allows them to sell your property and use the money from the sale to help pay off the debt.

Coronavirus - if your mortgage provider is trying to repossess your home

If you're struggling to pay your mortgage arrears because of coronavirus, contact your mortgage provider to explain the situation. You can find out about asking your lender to pause your mortgage payments for up to 6 months.

Your mortgage provider shouldn’t evict you until 1 April 2021. Before this date, they can start to take court action against you, or restart action they've paused. If they do try to repossess your home, talk to an adviser.

You can find out what to do if you're struggling to pay your mortgage because of coronavirus.

If the repossession was paused because of coronavirus

If your lender had already started possession action against you but it was paused because of coronavirus, this can start again.

If the original claim started before 3 August 2020, your lender should write to you to tell you your case has started again. This is called a 'reactivation notice'. They don't have to send a reactivation notice if they already have a possession order or 'notice of eviction' from the court.

Read the reactivation notice carefully. It will contain instructions you need to follow. It might tell you what your new deadline is.

If you're not sure when your deadline is or you think you've missed it, contact the court. You can also check with your solicitor or adviser, if you have one.

If you can't meet the deadline, write to the court to tell them why and ask if they can change it. For example, tell them if you're too ill to meet the deadline. You should do this as soon as possible after getting the letter.

How your mortgage lender can take possession of your home

Your lender must go through the courts before they can take possession of your property. This is called taking possession action.

Your mortgage lender should not start possession action against you without giving you a reasonable chance to make arrangements to pay off the arrears, if you are able to.

Check what your mortgage lender must do before they start possession action.

If your lender starts possession action, you will get court papers. 

The court will tell you the date they'll look at the case for the first time - this is called a 'review date'. The review date is a chance to resolve things without a full court hearing. You can get free legal advice on the review date. Before the review date, read the letters from the court and make sure you know how to get this advice.

You can check what you need to do when your lender starts possession action.

If the case goes to a full court hearing, a judge will decide whether or not to grant your lender possession of your home.

This will depend on whether or not you are able to come to an agreement with your lender to pay off the arrears.

If you are able to make an acceptable offer to repay the arrears, the court will make a suspended possession order. This means that, so long as you keep to the terms of the order, you will be able to stay in your home.

For more information about suspended possession orders, see What happens when your mortgage lender takes you to court.

However, if the judge decides that you are unable to make an acceptable offer to repay the arrears, they may make an outright possession order. This is an order which says that your lender can take possession of your property and that you will have to leave it by a certain date.

If you haven't left your home by the date on the outright possession order, your mortgage lender will need to apply to the court for a warrant of possession before you can be evicted.

There may still be time before the warrant of possession is issued for you to take action which will allow you to stay in your home.

Changing the court's decision to grant a possession order

Even though the court may have granted your mortgage lender possession of your home, it might not be too late to stop the eviction going ahead.

You might be able to ask the court to suspend the possession and allow you to stay in your home if your circumstances have changed. For example, if your income has increased and you can make payments towards arrears.

If you're in this position, talk to an adviser.

You might be able to ask the court to:

Suspend an outright possession order

If you can afford to repay the arrears to your lender, you can apply to the court for the order to be suspended. To do this, you’ll need to complete form N244. You can download the N244 form on GOV.UK or get one from the court. If your offer is acceptable, the court will make a suspended possession order.

Appeal against the order

If you believe that the judge was wrong to make a possession order, you might be able to appeal to a higher court. 

You can only appeal in very rare situations. For example, if the judge got the facts of your case wrong or didn’t take all the facts into account. You have 21 days to make an appeal after your hearing.

If you think you have reasons to appeal, you should get expert legal advice. Check how to find an affordable solicitor.

Set aside the order

You may be able to apply to set aside the possession order. For example, if you had good reason for not attending the hearing and you have a defence .

If you think you have reasons to set aside the order, you should get expert legal advice.

What happens after the court hearing

If the court has granted your mortgage lender an outright possession order, the order will give a date by which you should leave your home. This is normally 28 days after the hearing. You can ask the court for an extension of this period. You might want to do this if, for example, you need more time to find alternative accommodation.

Your lender can also apply for a warrant of possession if they have a suspended possession order and you have not kept to the terms of the order.

You don't have to leave by the date on the possession order. If you haven't left by this date, your lender must apply for a warrant of possession. 

The warrant of possession gives the court bailiff the authority to evict you from your home. Your lender can't legally evict you without this warrant.

The bailiffs have to give you a notice of eviction with the date and time of your eviction. They have to give you the notice at least 14 days before they evict you.

You could try and use the time before the warrant of possession is granted to try and come to an agreement with your lender which would let you stay in your home. Or you could go back to the court and ask them to vary or postpone the possession order.

Even if your lender has got a warrant of possession, it's not too late to try and come to an agreement with them or to ask the court to suspend the warrant.

You may be able to do this if you want more time to sell the property yourself, or because you are able to make an offer to pay the arrears.

If the court agrees to suspend the warrant, you can stay in your property for as long as you keep up the payments or until it is sold.

For more information about selling your property to pay off your mortgage arrears, see Selling your property to clear mortgage debts.

If you want to ask the court to suspend a warrant of possession, you should talk to an adviser.

What happens during an eviction

There is no fixed procedure for an eviction. For example, there are no rules about what time of day bailiffs can call, or what they must do or say.

However, bailiffs must, act reasonably. They are entitled to use a reasonable amount of force if they need to, to enter your home, to remove you and anyone else who is there.

Your lender will be at the eviction so that the bailiff can hand over the keys of the property to them. Sometimes, the lender will send along a representative instead such as an estate agent appointed to sell the property,

The locks will be changed to prevent you re-entering. If you are not at home when the bailiffs arrive, they are allowed to break in and change the locks.

If the bailiffs think there might be some resistance from you, they may ask the police to be present when they carry out the eviction. The police are not allowed to help the bailiffs with the eviction. They are only there in case there is a breach of the peace.

Your lender has a right to vacant possession of your property which means that all your furniture and belongings must be removed. The bailiffs should not remove any of your furniture or belongings but will usually watch while you do this. If you refuse to remove your possessions, your lender is entitled to remove them. Your lender can also get a court order requiring you to remove your possessions.

Once you have been evicted, you will not usually be able to get back into the property. However, you may be able to make arrangements with your lender to leave your belongings locked inside and to collect them later.

If the bailiffs arrive when you are not at home and change the locks, leaving your possessions in the property, you will need to contact your lender. Your lender should then arrange to let you into the property to collect your possessions.

Handing back the keys to your mortgage lender

You may be tempted to just leave the property and hand back the keys to your mortgage lender before they get an outright possession order. If you decide to do this, you'll still:

  • be responsible for mortgage payments, buildings insurance and other costs until the property is sold
  • still have to make up the difference if the sale doesn't make enough to cover what you owe

It would be better to try and sell the property yourself, rather than wait to be evicted and let your mortgage lender sell it. You may still be able to sell the property yourself, even if your lender has got an outright possession order or a warrant of possession.

If you want to apply to your local council for homeless help, don't hand back the keys without talking to them first and explaining your situation. They might consider you intentionally homeless - this means they might not agree to rehouse you. If you’re handing back the keys because you can’t afford to stay in the property, your local council won’t consider you intentionally homeless and they should help rehouse you.

If you're thinking about applying for homeless help, talk to an adviser.

For more information about selling your property to pay off your mortgage arrears, see Selling your property to clear mortgage debts.

What happens to your property after you've been evicted

If your mortgage lender has been granted a possession order, you will still be responsible for the mortgage payments until the property is sold. This is regardless of whether you are still living there. You will also be responsible for the cost of repairs, maintenance and insurance. You should check your insurance policy to see whether it is still valid if you're not living there. However, your lender may insure the property themselves and pass the costs on to you.

Your lender has a duty of care towards you when selling your property. This means they must try and get the best price they resonably can for your property - but they’ll also try and sell it quickly. Your lender might sell your property at auction. Repossessed properties often sell for less at auction than they would on the open market.

If you believe that you have been treated unfairly by your lender, for example, because they took a long time to sell your property and your arrears went up because of this, you can complain to the Financial Ombudsman Service.

Once your lender has sold your property they will:

  • take what is owed on the mortgage from the proceeds of the sale
  • deduct any legal and estate agents' fees
  • deduct any sums they have paid for insurance and maintenance of the property
  • repay any other lenders if the property has been used as security for a loan
  • give anything which is left over to you - although there may be nothing left over to give you.

For more information about properties which have been used as a security for a loan, see What happens when your mortgage lender takes you to court.

What happens if there is a shortfall

If the money from the sale of the property is not enough to repay what you owe, you will have to pay the difference. This is called a shortfall. The lender will send you a bill for the shortfall. If you are unable to make an arrangement to repay it, your lender may go to court to force you to pay this amount.

In most cases, there is a time limit for your lender to take action to recover a shortfall. The question of time limits for the recovery of a mortgage shortfall can be complicated and it's best to get advice.

If you don't pay off the mortgage shortfall and then buy another property, the lender of your first property may take court action against you. If they get a court order against you, they could then apply for a charging order against your new property. This means that, when you sell the new property, the proceeds of the sale will be used to repay the shortfall. It is also possible that your lender could get an order for sale of your new home to repay the debt on the previous one.

If you still owe some of your mortgage after you have been evicted for mortgage arrears, you should talk to an adviser.

Taking out another mortgage after eviction for mortgage arrears

If you've been evicted for mortgage arrears, you may have problems taking out another mortgage. This is because details of any payments you've missed are held on file by credit reference agencies, such as Experian or Equifax. Mortgage lenders will contact them to find out whether you have a good credit rating. However, your credit file won’t show the repossession order.

Your past credit history may not stop you taking out a mortgage, but if you still owe money on a mortgage and try to take out another one, you may have difficulty getting a loan.

Finding somewhere to live after eviction

If you’re evicted and you have nowhere else to live, you may be able to get help from your local authority. They may have a responsibility to rehouse you or help you to find somewhere to live because you are homeless. 

Further help

For a list of organisations and websites where you can get more help and information about how to deal with mortgage arrears, see Further help in What happens when your mortgage lender takes you to court.

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